FactCheck Mailbag, Week of Sept. 13-19

This week, readers sent us comments about congressional support for President Obama’s jobs plan and whether or not Social Security is a Ponzi scheme.

In the FactCheck Mailbag, we feature some of the e-mail we receive. Readers can send comments to editor@factcheck.org. Letters may be edited for length.

No Need for Bipartisanship

I believe the fact-checkers missed the point on this one [“Obama’s Jobs Act ‘Bipartisan’? Not Entirely,” Sept. 12]. I, for one, don’t particularly care if a plan to jump-start the jobs’ market has the support of the idiots on both sides of the aisle. I want to know if the programs he proposes will actually work to create jobs or not. That is one of the great problems with our media today. More and more media types think it’s important to show both sides of the debate as if there are only two sides. The fact-checkers are supposed [to] figure out if the policy proposals are sound or not.

Cpt. Matt FinniePittsburgh, Pa.

If It Walks, Talks and Acts Like a Ponzi Scheme …

In your article [“FactChecking the Reagan Debate,” Sept. 8], you say Social Security “does pay current beneficiaries mainly from the taxes paid by current workers (and their employers) who expect to draw benefits in the future.” And later in the same article you deny that Social Security is such a scheme because:

But the system doesn’t meet the common definition of a “Ponzi,” which is a criminal fraud, relying on deception. The Securities and Exchange Commission, for example, says a Ponzi is “an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

So if you or I ran a Social Security plan that did just what the existing plan does we would be crooks. But because the government does it they are not crooks. The scheme (you admit) pays old investors with money from new investors. That is the definition of a Ponzi scheme. As far as deception, the government promised retirement benefits that it has no money to pay. Again, if you or I did this we would be crooks because it sure seems like deception to me. I am sure Ponzi would write a definition that excluded his scheme just like the government has. I don’t think the SEC (a government entity) is the fair judge of a government Ponzi scheme.

It was created as a Ponzi scheme. It is a Ponzi scheme. What is the problem with a Ponzi scheme? You eventually run out of new investors. That means the fraud cannot continue. That is what is happening today. If it walks like a duck, quacks like a duck and acts like a duck, it is a duck. Please substitute Ponzi scheme for duck.

And any denial that it fits the definition of a Ponzi scheme including deception is to fly in the face of facts. Please reconsider your stand on Social Security.